Market Overview

PennyMac Mortgage Investment Trust Reports First Quarter 2020 Results

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PennyMac Mortgage Investment Trust (NYSE:PMT) today reported a net loss attributable to common shareholders of $600.9 million, or $5.99 per common share for the first quarter of 2020, on net investment losses of $506.5 million. PMT previously announced a cash dividend for the first quarter of 2020 of $0.25 per common share of beneficial interest, which was declared on March 25, 2020 and paid on April 30, 2020 to common shareholders of record as of April 15, 2020.

First Quarter 2020 Highlights

Financial results:

  • Net loss attributable to common shareholders of $600.9 million, versus net income attributable to common shareholders of $52.4 million in the prior quarter
    • Driven by non-cash fair value losses on government-sponsored enterprise (GSE) credit risk transfer (CRT) investments related to the COVID-19 crisis, partially offset by outsized results in the interest rate sensitive strategies segment resulting from substantial gains on interest rate hedge instruments and record correspondent production results
  • Book value per common share of $15.16 at March 31, 2019, down from $21.37 at December 31, 2019

Other investment and financing highlights:

  • Investment activity driven by strong correspondent production volumes
    • Conventional correspondent loan production totaled $18.0 billion in unpaid principal balance (UPB), down 20 percent from the prior quarter and up 100 percent from the first quarter of 2019
    • CRT deliveries totaled $14.7 billion in UPB, resulting in a firm commitment to purchase $555 million of CRT securities
    • Added $249 million of new mortgage servicing rights (MSR) investments
  • Raised $5.6 million in February through the "At-The-Market" equity program, issuing 241,000 shares at a weighted average price of $23.46; repurchased approximately 783,000 PMT common shares in March at a weighted average price of $7.39, or a total cost of $5.8 million

Notable activity after quarter end:

  • Retired the 5.375% senior exchangeable unsecured notes due May 1, 2020
    • Repurchased $123.6 million in principal of the notes at a weighted average price of 98.6 percent of par value, resulting in total savings of approximately $2.2 million
    • Repaid the remaining $126.4 million in principal of the notes on the maturity date (May 1)

"PMT's financial results in the first quarter reflected the extreme market dislocations resulting from the COVID-19 crisis and were driven by non-cash fair value losses on CRT investments partially offset by outstanding performance from the interest rate sensitive strategies and correspondent production," said President and CEO David Spector. "We believe that the fair value losses recognized on our CRT investments in the first quarter are outsized compared to the additional losses from borrower defaults that we expect to incur over the life of these investments. Furthermore, PFSI, PMT's manager and subservicer, is well-positioned to refinance qualifying borrowers and successfully manage forbearance and other assistance programs to reduce the likelihood of borrower default and ultimate credit losses."

Mr. Spector continued, "We believe that PMT's performance during this crisis and the strength of PMT's liquidity and capital position are the direct result of our manager's steadfast focus on risk management, including interest rate, credit and operational risk disciplines, throughout our more than 10-year history. Unlike other market participants, PMT has not sold any assets to raise liquidity; and as a result of the innovative term financing structure we put in place, PMT has not been subject to margin calls for its CRT investments. While we have curtailed new investments in CRT, recent market dislocations have expanded the opportunity for PMT as certain competitors have limited or reduced their participation in what was already a capacity constrained industry. Looking ahead, we expect improved financial performance and are confident in the return potential of PMT's investment strategies."

The following table presents the contributions of PMT's segments, consisting of Credit Sensitive Strategies, Interest Rate Sensitive Strategies, Correspondent Production, and Corporate:

Quarter ended March 31, 2020
Credit sensitive strategies Interest rate sensitive strategies Correspondent production Corporate Consolidated
 
 
(in thousands)
Net investment (loss) income:
Net (loss) gain on investments:
CRT investments

$

(979,805

)

$

-

 

$

-

 

$

-

 

$

(979,805

)

Loans at fair value

 

(1,142

)

 

-

 

 

-

 

 

-

 

 

(1,142

)

Loans held by variable interest entity net of asset-backed secured financing

 

-

 

 

(941

)

 

-

 

 

-

 

 

(941

)

Mortgage-backed securities

 

(3,138

)

 

119,105

 

 

-

 

 

-

 

 

115,967

 

Hedging derivatives

 

64,976

 

 

(45

)

 

-

 

 

-

 

 

64,931

 

Excess servicing spread investments

 

-

 

 

(14,141

)

 

-

 

 

-

 

 

(14,141

)

 

(919,109

)

 

103,978

 

 

-

 

 

-

 

 

(815,131

)

Net loan servicing fees

 

-

 

 

244,572

 

 

-

 

 

-

 

 

244,572

 

Net gain on loans acquired for sale

 

(32,306

)

 

-

 

 

81,081

 

 

-

 

 

48,775

 

Net interest (expense) income:
Interest income

 

6,556

 

 

33,241

 

 

31,407

 

 

919

 

 

72,123

 

Interest expense

 

(14,566

)

 

(41,608

)

 

(24,309

)

 

(585

)

 

(81,068

)

 

(8,010

)

 

(8,367

)

 

7,098

 

 

334

 

 

(8,945

)

Other income

 

166

 

 

-

 

 

23,988

 

 

58

 

 

24,212

 

 

(959,259

)

 

340,183

 

 

112,167

 

 

392

 

 

(506,517

)

Expenses:
Loan fulfillment and servicing fees payable to PennyMac Financial Services, Inc.

 

301

 

 

14,220

 

 

41,940

 

 

-

 

 

56,461

 

Management fees payable to PennyMac Financial Services, Inc.

 

-

 

 

-

 

 

-

 

 

9,055

 

 

9,055

 

Other

 

911

 

 

1,182

 

 

4,918

 

 

5,381

 

 

12,392

 

$

1,212

 

$

15,402

 

$

46,858

 

$

14,436

 

$

77,908

 

Pretax (loss) income

$

(960,471

)

$

324,781

 

$

65,309

 

$

(14,044

)

$

(584,425

)

 

Credit Sensitive Strategies Segment

The Credit Sensitive Strategies segment primarily includes results from CRT, and also includes distressed loans and non-Agency subordinated bonds. Pretax loss for the segment was $960.5 million on net investment loss of $959.3 million, versus pretax income of $38.9 million on net investment income of $40.0 million in the prior quarter.

Net loss on investments in the segment was $919.1 million, versus a net gain on investments of $33.7 million in the prior quarter.

Net loss on CRT investments for the quarter was $979.8 million, versus net gain of $36.9 million in the prior quarter, and included $969.2 million in valuation-related losses which reflects significant changes in the market's discount rate and expectation for credit losses resulting from the COVID-19 crisis. Net loss on CRT investments also included $55.9 million in realized gains and carry, up from $52.5 million in the prior quarter. Recognized losses were $1.5 million, compared to $1.7 million in the prior quarter.

The Company is curtailing new CRT investments as the Federal Housing Finance Agency has instructed Fannie Mae and Freddie Mac to gradually wind down front-end lender risk share transactions such as PMT's by the end of this year; while CRT deliveries totaled $14.7 billion in UPB for the first quarter, future deliveries in 2020 are expected to total approximately $3 billion in UPB.

The net loss on CRT investments was partially offset by a $65.0 million net gain on hedging derivatives.

PMT's distressed loan portfolio generated realized and unrealized losses totaling $1.1 million, compared to losses of $1.0 million in the prior quarter.

The Credit Sensitive Strategies segment also recorded a net loss on loans acquired for sale of $32.3 million versus a net gain of $17.8 million in the prior quarter. These amounts represent the recognition of the fair value of firm commitment to acquire CRT securities for deliveries during the first quarter; a related $5.7 million in net gain was attributed to the Correspondent Production segment, down from $15.6 million in the prior quarter.

Net interest expense for the segment totaled $8.0 million, down from $11.5 million in the prior quarter. Interest income totaled $6.6 million, down from $9.0 million in the prior quarter, and interest expense totaled $14.6 million, down from $20.5 million in the prior quarter, driven primarily by lower short-term interest rates.

Segment expenses were $1.2 million, up from $1.0 million in the prior quarter.

Interest Rate Sensitive Strategies Segment

The Interest Rate Sensitive Strategies segment includes results from investments in MSRs, excess servicing spread (ESS), Agency mortgage-backed securities (MBS), non-Agency senior MBS and interest rate hedges. Pretax income for the segment was $324.8 million on revenues of $340.2 million, compared to pretax income of $12.3 million on revenues of $26.6 million in the prior quarter. The segment includes investments that typically have offsetting fair value exposures to changes in interest rates. For example, in a period with decreasing interest rates, MSRs and ESS typically decrease in fair value whereas Agency MBS typically increase in fair value.

The results in the Interest Rate Sensitive Strategies segment consist of net gains and losses on investments, net interest income and net loan servicing fees, as well as associated expenses.

Net gain on investments for the segment was $104.0 million, and consisted of $119.1 million of gains on MBS, partially offset by $14.1 million of losses in the fair value of ESS investments, and $1.0 million of losses on loans held by variable interest entity net of asset-backed secured financing and in the fair value of hedging derivatives.

Net loan servicing fees were $244.6 million, up from $20.6 million in the prior quarter. Net loan servicing fees included increased servicing fees of $94.5 million primarily driven by a larger portfolio, and $7.2 million in other fees, reduced by $64.0 million in realization of MSR cash flows, which was up 8 percent from the prior quarter. Net loan servicing fees also included a $563.2 million decrease in the fair value of MSRs, more than offset by $767.2 million in related hedging gains and $2.9 million of MSR recapture income. PMT's hedging activities are intended to manage the Company's net exposure across all interest rate sensitive strategies, which include MSRs, ESS and MBS.

The following schedule details net loan servicing fees:

Quarter ended
March 31, 2020 December 31, 2019 March 31, 2019
(in thousands)
From non-affiliates:
Servicing fees (1)

$

94,469

 

$

90,822

 

$

61,272

 

Other fees

 

7,191

 

 

7,489

 

 

3,208

 

Effect of MSRs:
Carried at fair value—change in fair value
Realization of cashflows

 

(63,955

)

 

(59,248

)

 

(40,821

)

Other

 

(563,246

)

 

129,292

 

 

(96,508

)

 

(627,201

)

 

70,044

 

 

(137,329

)

Gains (losses) on hedging derivatives

 

767,186

 

 

(149,970

)

 

41,135

 

 

139,985

 

 

(79,680

)

 

(96,194

)

 

241,645

 

 

18,385

 

 

(31,714

)

From PFSI—MSR recapture income

 

2,927

 

 

2,207

 

 

634

 

Net loan servicing fees

$

244,572

 

$

20,592

 

$

(31,080

)

 
(1) Includes contractually specified servicing fees

MSR and ESS valuation losses were primarily driven by expectations for increased prepayment activity in the future related to lower interest rates and increased discount rates demanded by market participants. PMT benefited from higher recapture income from PFSI for elevated prepayment activity during the quarter. PMT generally benefits from recapture income when the prepayment of a loan underlying PMT's MSR or ESS results from refinancing by PFSI.

Net interest expense for the segment was $8.4 million, compared to net interest income of $5.1 million in the prior quarter. Interest income totaled $33.2 million, down from $43.7 million in the prior quarter, primarily driven by decreased income from custodial deposits due to lower earnings rates. Interest expense totaled $41.6 million, up from $38.7 million in the prior quarter, primarily driven by increased financing expenses related to a larger MBS portfolio.

Segment expenses were $15.4 million, up slightly from the prior quarter.

Correspondent Production Segment

PMT acquires newly originated loans from correspondent sellers and typically sells or securitizes the loans, resulting in current-period income and additions to its investments in MSRs and CRT related to a portion of its production. PMT's Correspondent Production segment generated pretax income of $65.3 million, up from $23.0 million in the prior quarter.

Through its correspondent production activities, PMT acquired $29.8 billion in UPB of loans originated by nonaffiliates, down 20 percent from the prior quarter and up 100 percent from the first quarter of 2019. Of total correspondent acquisitions, conventional conforming and jumbo acquisitions from nonaffiliates totaled $16.2 billion, and government-insured or guaranteed acquisitions totaled $13.6 billion, down from $20.5 billion and $16.7 billion, respectively, in the prior quarter. PMT also acquired $1.9 billion of conventional loans originated by PennyMac Financial; PMT does not expect to purchase conventional loans originated by PFSI in upcoming quarters. Interest rate lock commitments on conventional loans totaled $19.1 billion, down from $19.7 billion in the prior quarter and up from $9.0 billion in the first quarter of 2019.

Segment revenues were $112.2 million, a 28 percent increase from the prior quarter and included net gain on loans acquired for sale of $81.1 million, other income of $24.0 million, which primarily consists of volume-based origination fees, and net interest income of $7.1 million. Net gain on loans acquired for sale in the quarter increased by $33.7 million from the prior quarter, driven by significantly higher margins. Interest income was $31.4 million, down from $41.6 million in the prior quarter from lower rates and interest expense was $24.3 million, down from $33.4 million in the prior quarter driven by lower conventional acquisition volumes.

Segment expenses were $46.9 million, down from $64.5 million in the prior quarter driven by the decrease in production volumes as well as a decrease in the weighted average fulfillment fee during the quarter. The weighted average fulfillment fee rate in the first quarter was 26 basis points, down from 28 basis points in the prior quarter.

Corporate Segment

The Corporate segment includes interest income from cash and short-term investments, management fees, and corporate expenses.

Segment net investment income was $0.4 million, versus net investment income of $0.9 million in the prior quarter.

Management fees were $9.1 million, down 12 percent from the prior quarter primarily driven by decreased incentive fees paid to PFSI based on PMT's financial performance.

Other segment expenses were $5.4 million, down from $5.6 million in the prior quarter.

Taxes

PMT recorded income tax expense of $10.2 million compared to $0.7 million in the prior quarter as a result of recording additional valuation allowance against PMT's net operating loss carryforwards.

***

Management's slide presentation will be available in the Investor Relations section of the Company's website at www.pennymac-REIT.com beginning at 1:30 p.m. (Pacific Time) on Thursday, May 7, 2020.

About PennyMac Mortgage Investment Trust

PennyMac Mortgage Investment Trust is a mortgage real estate investment trust (REIT) that invests primarily in residential mortgage loans and mortgage-related assets. PMT is externally managed by PNMAC Capital Management, LLC, a wholly-owned subsidiary of PennyMac Financial Services, Inc. (NYSE:PFSI). Additional information about PennyMac Mortgage Investment Trust is available at www.PennyMac-REIT.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding management's beliefs, estimates, projections and assumptions with respect to, among other things, the Company's financial results, future operations, business plans and investment strategies, as well as industry and market conditions, all of which are subject to change. Words like "believe," "expect," "anticipate," "promise," "plan," and other expressions or words of similar meanings, as well as future or conditional verbs such as "will," "would," "should," "could," or "may" are generally intended to identify forward-looking statements. Actual results and operations for any future period may vary materially from those projected herein and from past results discussed herein. Factors which could cause actual results to differ materially from historical results or those anticipated include, but are not limited to: our exposure to risks of loss and disruptions in operations resulting from adverse weather conditions, man-made or natural disasters, climate change and pandemics such as COVID-19; the impact to our CRT agreements of increased borrower requests for forbearance under the CARES Act; changes in the Company's investment objectives or investment or operational strategies, including any new lines of business or new products and services that may subject it to additional risks; volatility in the Company's industry, the debt or equity markets, the general economy or the real estate finance and real estate markets specifically, whether the result of market events or otherwise; events or circumstances which undermine confidence in the financial and housing markets or otherwise have a broad impact on financial and housing markets, such as the sudden instability or collapse of large depository institutions or other significant corporations, terrorist attacks, natural or manmade disasters, or threatened or actual armed conflicts; changes in general business, economic, market, employment and domestic and international political conditions, or in consumer confidence and spending habits from those expected; declines in real estate or significant changes in U.S. housing prices or activity in the U.S. housing market; the availability of, and level of competition for, attractive risk-adjusted investment opportunities in mortgage loans and mortgage-related assets that satisfy the Company's investment objectives; the inherent difficulty in winning bids to acquire mortgage loans, and the Company's success in doing so; the concentration of credit risks to which the Company is exposed; the degree and nature of the Company's competition; the Company's dependence on its manager and servicer, potential conflicts of interest with such entities and their affiliates, and the performance of such entities; changes in personnel and lack of availability of qualified personnel at its manager, servicer or their affiliates; the availability, terms and deployment of short-term and long-term capital; the adequacy of the Company's cash reserves and working capital; the Company's ability to maintain the desired relationship between its financing and the interest rates and maturities of its assets; the timing and amount of cash flows, if any, from the Company's investments; unanticipated increases or volatility in financing and other costs, including a rise in interest rates; the performance, financial condition and liquidity of borrowers; the ability of the Company's servicer, which also provides the Company with fulfillment services, to approve and monitor correspondent sellers and underwrite loans to investor standards; incomplete or inaccurate information or documentation provided by customers or counterparties, or adverse changes in the financial condition of the Company's customers and counterparties; the Company's indemnification and repurchase obligations in connection with mortgage loans it purchases and later sells or securitizes; the quality and enforceability of the collateral documentation evidencing the Company's ownership and rights in the assets in which it invests; increased rates of delinquency, default and/or decreased recovery rates on the Company's investments; the performance of mortgage loans underlying mortgage-backed securities in which the Company retains credit risk; the Company's ability to foreclose on its investments in a timely manner or at all; increased prepayments of the mortgages and other loans underlying the Company's mortgage-backed securities or relating to the Company's mortgage servicing rights, excess servicing spread and other investments; the degree to which the Company's hedging strategies may or may not protect it from interest rate volatility; the effect of the accuracy of or changes in the estimates the Company makes about uncertainties, contingencies and asset and liability valuations when measuring and reporting upon the Company's financial condition and results of operations; the Company's ability to maintain appropriate internal control over financial reporting; technologies for loans and the Company's ability to mitigate security risks and cyber intrusions; the Company's ability to obtain and/or maintain licenses and other approvals in those jurisdictions where required to conduct its business; the Company's ability to detect misconduct and fraud; the Company's ability to comply with various federal, state and local laws and regulations that govern its business; developments in the secondary markets for the Company's mortgage loan products; legislative and regulatory changes that impact the mortgage loan industry or housing market; changes in regulations or the occurrence of other events that impact the business, operations or prospects of government agencies such as the Government National Mortgage Association, the Federal Housing Administration or the Veterans Administration, the U.S. Department of Agriculture, or government-sponsored entities such as the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, or such changes that increase the cost of doing business with such entities; the Dodd-Frank Wall Street Reform and Consumer Protection Act and its implementing regulations and regulatory agencies, and any other legislative and regulatory changes that impact the business, operations or governance of mortgage lenders and/or publicly-traded companies; the Consumer Financial Protection Bureau and its issued and future rules and the enforcement thereof; changes in government support of homeownership; changes in government or government-sponsored home affordability programs; limitations imposed on the Company's business and its ability to satisfy complex rules for it to qualify as a REIT for U.S. federal income tax purposes and qualify for an exclusion from the Investment Company Act of 1940 and the ability of certain of the Company's subsidiaries to qualify as REITs or as taxable REIT subsidiaries for U.S. federal income tax purposes, as applicable, and the Company's ability and the ability of its subsidiaries to operate effectively within the limitations imposed by these rules; changes in governmental regulations, accounting treatment, tax rates and similar matters (including changes to laws governing the taxation of REITs, or the exclusions from registration as an investment company); the Company's ability to make distributions to its shareholders in the future; the Company's failure to deal appropriately with issues that may give rise to reputational risk; and the Company's organizational structure and certain requirements in its charter documents. You should not place undue reliance on any forward-looking statement and should consider all of the uncertainties and risks described above, as well as those more fully discussed in reports and other documents filed by the Company with the Securities and Exchange Commission from time to time. The Company undertakes no obligation to publicly update or revise any forward-looking statements or any other information contained herein, and the statements made in this press release are current as of the date of this release only.

 

PENNYMAC MORTGAGE INVESTMENT TRUST AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 
March 31, 2020 December 31, 2019 March 31, 2019
(in thousands except share amounts)
ASSETS
Cash

$

1,099,380

 

$

104,056

$

68,538

 

Short-term investments

 

137,960

 

 

90,836

 

29,751

 

Mortgage-backed securities at fair value

 

3,947,420

 

 

2,839,633

 

2,589,106

 

Loans acquired for sale at fair value

 

2,856,042

 

 

4,148,425

 

1,435,071

 

Loans at fair value

 

251,423

 

 

270,793

 

398,664

 

Excess servicing spread received from PennyMac Financial Services, Inc.

 

157,109

 

 

178,586

 

205,081

 

Derivative and credit risk transfer strip assets

 

173,310

 

 

202,318

 

188,710

 

Firm commitment to purchase credit risk transfer securities at fair value

 

-

 

 

109,513

 

79,784

 

Real estate acquired in settlement of loans

 

50,838

 

 

65,583

 

72,175

 

Real estate held for investment

 

-

 

 

-

 

42,346

 

Deposits securing credit risk transfer arrangements

 

1,855,936

 

 

1,969,784

 

1,137,283

 

Mortgage servicing rights

 

1,157,326

 

 

1,535,705

 

1,156,908

 

Servicing advances

 

39,030

 

 

48,971

 

37,392

 

Due from PennyMac Financial Services, Inc.

 

3,512

 

 

2,760

 

3,345

 

Other

 

189,202

 

 

204,388

 

111,833

 

Total assets

$

11,918,488

 

$

11,771,351

$

7,555,987

 

LIABILITIES
Assets sold under agreements to repurchase

$

6,348,192

 

$

6,648,890

$

4,179,829

 

Mortgage loan participation and sale agreements

 

-

 

 

-

 

73,142

 

Exchangeable senior notes

 

444,525

 

 

443,506

 

248,652

 

Notes payable secured by credit risk transfer and mortgage servicing assets

 

1,967,526

 

 

1,696,295

 

739,224

 

Asset-backed financing of a variable interest entity at fair value

 

232,565

 

 

243,360

 

275,509

 

Interest-only security payable at fair value

 

14,134

 

 

25,709

 

32,564

 

Assets sold to PennyMac Financial Services, Inc. under agreement to repurchase

 

99,766

 

 

107,512

 

125,929

 

Derivative and credit risk transfer strip liabilities

 

462,639

 

 

6,423

 

8,750

 

Firm commitment to purchase credit risk transfer securities at fair value

 

409,649

 

 

-

 

-

 

Accounts payable and accrued liabilities

 

40,534

 

 

91,149

 

74,294

 

Due to PennyMac Financial Services, Inc.

 

56,223

 

 

48,159

 

29,951

 

Income taxes payable

 

12,067

 

 

1,819

 

32,866

 

Liability for losses under representations and warranties

 

7,300

 

 

7,614

 

7,688

 

Total liabilities

 

10,095,120

 

 

9,320,436

 

5,828,398

 

SHAREHOLDERS' EQUITY
Preferred shares of beneficial interest

 

299,707

 

 

299,707

 

299,707

 

Common shares of beneficial interest—authorized, 500,000,000 common shares of $0.01 par value; issued and outstanding 99,941,390, 100,182,227 and 68,412,435 common shares, respectively

 

998

 

 

1,002

 

684

 

Additional paid-in capital

 

2,126,264

 

 

2,127,889

 

1,431,887

 

(Accumulated deficit) retained earnings

 

(603,601

)

 

22,317

 

(4,689

)

Total shareholders' equity

 

1,823,368

 

 

2,450,915

 

1,727,589

 

Total liabilities and shareholders' equity

$

11,918,488

 

$

11,771,351

$

7,555,987

 

 

PENNYMAC MORTGAGE INVESTMENT TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 
For the Quarterly Periods Ended
March 31, 2020 December 31, 2019 March 31, 2019
(in thousands, except per share amounts)
Investment (Loss) Income
Net (loss) gain on investments:

$

(815,131

)

$

34,682

 

$

95,093

 

Net loan servicing fees:
Servicing fees

 

104,587

 

 

98,311

 

 

64,480

 

Change in fair value of mortgage servicing rights

 

139,985

 

 

(79,926

)

 

(96,194

)

 

244,572

 

 

18,385

 

 

(31,714

)

Net gain on loans acquired for sale:

 

48,775

 

 

65,337

 

 

21,323

 

Loan origination fees

 

23,928

 

 

31,959

 

 

12,938

 

Interest income

 

72,123

 

 

95,210

 

 

63,081

 

Interest expense

 

81,068

 

 

92,582

 

 

54,739

 

Net interest (expense) income

 

(8,945

)

 

2,628

 

 

8,342

 

Results of real estate acquired in settlement of loans

 

32

 

 

(526

)

 

(1,480

)

Other

 

252

 

 

364

 

 

1,482

 

Net investment (loss) income

 

(506,517

)

 

152,829

 

 

105,984

 

Expenses
Earned by PennyMac Financial Services, Inc.:
Loan fulfillment fees

 

41,940

 

 

58,297

 

 

27,574

 

Loan servicing fees

 

14,521

 

 

13,695

 

 

10,570

 

Management fees

 

9,055

 

 

10,314

 

 

7,248

 

Loan origination

 

4,249

 

 

5,382

 

 

2,277

 

Safekeeping

 

1,658

 

 

1,729

 

 

736

 

Professional services

 

1,496

 

 

1,066

 

 

1,327

 

Loan collection and liquidation

 

750

 

 

218

 

 

1,584

 

Compensation

 

519

 

 

1,513

 

 

1,969

 

Other

 

3,720

 

 

3,551

 

 

3,466

 

Total expenses

 

77,908

 

 

95,765

 

 

56,751

 

(Loss) income before provision for (benefit from) income taxes

 

(584,425

)

 

59,271

 

 

49,233

 

Provision for (benefit from) income taxes

 

10,248

 

 

674

 

 

(3,660

)

Net (loss) income

 

(594,673

)

 

58,597

 

 

52,893

 

Dividends on preferred shares

 

6,234

 

 

6,235

 

 

6,234

 

Net (loss) income attributable to common shareholders

$

(600,907

)

$

52,362

 

$

46,659

 

Earnings per share
Basic

$

(5.99

)

$

0.56

 

$

0.73

 

Diluted

$

(5.99

)

$

0.55

 

$

0.68

 

Weighted average shares outstanding
Basic

 

100,245

 

 

93,169

 

 

64,629

 

Diluted

 

100,245

 

 

101,865

 

 

73,371

 

Dividends declared per common share

$

0.25

 

$

0.47

 

$

0.47

 

 

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